Which is better- the old or the new tax? With Auto Calculate Income Tax Preparation Excel-Based Software All in One for the Non-Government (Private) Employees for the F.Y.2023-24 and A.Y.2024-25

Which is better- the old or the new tax regime? Therefore, The Budget 2023 for the current financial year brought a major change for the assessee by introducing the new tax regime as voluntary compliance for all taxpayers.

However,

 Although a private individual can choose to switch to the old tax regime if he/she wishes.  In other words, There are advantages and disadvantages to both the old tax regime and the new tax regime, but it can be confusing for taxpayers to choose the most appropriate regime for themselves. Let us examine the various aspects to be considered in the old tax regime and the new tax regime in F.Y 2023-24.

You may also like- At a time 50 Employees Auto Calculate and automatic Preparation Income Tax Form 16 Part B for the Financial Year 2022-23 and Assessment Year 2023-24

Under the new tax regime

 For instance, The new tax regime has increased the range of tax rates from 0% to 30% with a minimum exemption of up to Rs 3 lakhs and a maximum tax rate of 30% applicable from Rs.15 lakhs. The new income tax rates are listed below:

INCOME TAX SLAB RATES IN THE NEW TAX REGIME 2023-24

ANNUAL INCOME NEW TAX REGIME
0-3 Lakhs Nil
3-6 Lakhs 5%
6-9 Lakhs 10%
9-12 Lakhs 15%
12-15 Lakhs 20%
Above 15 Lakhs 30%
Above all,

In addition, Highlights of the New Tax Regime 2023-24

1. The new tax regime is voluntary compliance for the year 2023-24.

2. A person earning Rs. 7 without annual entitlement to abatement.

3. Higher rate of surcharge on income above Rs. 5 crores reduced from 37% to 25%.

4. In order to simplify complicated paperwork and reduce the burden of compliance and administration on the taxpayer and tax authorities regarding tax deductions and exemptions, fewer deductions were made.

5. Some tax deductions not allowed under the new tax regime are available

A. Waiver of Travel Allowance

B. Rental Assistance

C. Educational Assistance for Children

D. Exemption for employment taxes

E. Interest on home loans

F. Deduction for specified

6. No stringent rules and regulations for your investments under the new tax regime.

After that,

You may also like- At a time 50 Employees Auto Calculate and automatic Preparation Income Tax Form 16 Part A&B for the Financial Year 2022-23 and Assessment Year 2023-24

SimilarlyComparison between the old tax regime and new tax regime

As announced in the 2023-24 investment budget, the new tax regime has been imposed by default, but still, an individual can choose between the old tax regime and the new tax regime if he/she wishes. If you want to claim deductions and exemptions, the old tax regime is more favorable, otherwise, the new tax regime has multiple levels of income brackets and rates.

However, The key point to understand here is which tax regime allows you to take home more money.

For instance, Let us take an example to understand the situation in both lights, Mr. Suresh earns Rs. 50,00,000 per annum. Above all, He is claiming a deduction under section 80C against LIC and EPF for Rs. 1,50,0 He has taken out health insurance for which he pays a premium of Rs 25,000 which he claims as tax deductible under section 80 D. He also claims a tax-free traveling allowance of Rs.38,000 and rent allowance of Rs. 1,60,0 Let’s calculate the tax due in both cases.

In other words,

Understand with the help of illustration 1 of New and old tax regimes for taxpayers:-

Illustration Old Tax Regime New Tax Regime
Income From Salary 50,00,000 50,00,000
Less:- Exemptions
House Rent Allowance
Leave Travel Allowance
(1,60,000)
(38,000)
Not Allowed
Not Allowed
Gross Total Income 48,02,000 50,00,000
Less:- Standard Deduction (50,000) (50,000)
Less Deduction U/s Chapter VI-A
(EPF +LIC+ Tuition Fees, etc)
(1,50,000) Not Allowed
Less:- Deduction U/s 80D
If Senior Citizen -Rs 50000 otherwise Rs.
25000 Maximum Allowed.
(25,000) Not Allowed
Less:- Other Deduction If any Allowed Not Allowed
Net Taxable Income 45,77,000 49,50,000
However,

Note: – Assume that the taxpayer is less than 60 years of age.

Therefore,

B. Total taxes payable under the new and old tax regimes

Tax Calculation Slab Old Tax Regime Rates Tax (Old) Amount Tax Calculation Slab New Tax Regime Rates Tax (New) Amount
0 – 2,50,000 0% Nil 0 – 3,00,000 Nil Nil
2,50,000 – 5,00,000 5% 12,500 3,00,000 – 6,00,000 5% 15,000
5,00,000 -10,00,000 20% 1,00,000 6,00,000 – 9,00,000 10% 30,000
Above 10,00,000 30% 10,73,100 9,00,000 – 12,00,000 15% 45,000
      12,00,000-15,00,000 20% 60,000
      Above 15,00,000 30% 10,35,000
Total Tax   11,85,600 Total Tax   11,85,000
Add: Higher Education Cess @4%   47,424 Add: Higher Education Cess @4%   47,400
Total Tax payable   12,33,024 Total Tax payable   12,32,400

In conclusion,

As the example above shows, people take home more money under the new tax system, but the situation will be different if the amount of additional payments and deductions are higher. It is therefore advisable to calculate your tax due under both regimes. 

Download Automated Income Tax Preparation Excel-Based Software All in One for the Government & Non-Government (Private) Employees for the F.Y.2022-23 and A.Y.2023-24

Which is better- the old or new tax regime?
Which is better- the old or new tax regime?
Which is better- the old or new tax regime?

Feature of this Excel Utility:-

1) This Excel utility prepares and calculates your income tax as per the New Section 115 BAC (New and Old Tax Regime)

2) This Excel Utility has an option where you can choose your option as a New or Old Tax Regime

3) This Excel Utility has a unique Salary Structure for Non-Government Employees Salary Structure.

4) Automated Income Tax Form 12 BA

5) Automated Income Tax Revised Form 16 Part A&B for the F.Y.2023-24

6) Automated Income Tax Revised Form 16 Part B for the F.Y.2023-24

7) Automated House Rent Exemption Calculation U/s 10(13A)

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